In 1939, Mollie Panter-Downes was 33. She had written her first novel at 16, and quickly established a living for herself from her writing. During the 1930s, she sold poems and stories to the New Yorker. At the outbreak of second world war, realising they had access to a valuable voice of England, they asked her to write their "Letter from London". These letters write to us now from a past that we think we know. Descriptions of pillar boxes chequered with a yellow paint that changed colour if the air became poisonous, "as sensitive as a chameleon". Sandbags everywhere. The balloon barrage "spread over the sky like some form of silvery dermatitis". Evacuated pets! We are informed of the little ways in which life had changed. There is the Englishness that we would expect: "Yesterday, people were saying that if there wasn't a war today it would be a bloody shame … In the general opinion, Hitler has got it coming to him." But there is also an understanding observation that doesn't just accept that stereotyped stoicism at face value. It is an aspect of wartime England that she closely examines in the numerous short stories she wrote during the same period.

Looking at what lies behind the stiff upper lip, it becomes less of a naturally stoical way of approaching life and more of a necessity for psychological survival. In rural and suburban living rooms, personal fear underpins all of the characters. Putting lives indefinitely on hold, war creates a gap where the "I" should be. In the "we" that is left, there is no room or time for emotion. It's not so much the British reserve, as the only way that terrified people facing the unknown could vaguely appear to cope.

This cannot be maintained indefinitely though, and sometimes the guard slips, even if just for a moment. In Goodbye, My Love, Ruth and Adrian are waiting for Wednesday, when Adrian will leave for the front line. When Wednesday arrives, their goodbye is not a grand, emotional one but an understated moment: "They said goodbye in the hall, a tiny cupboard built for a man to hang his hat in, for a woman to read a telephone message in – not for heroic partings." Hours after Adrian's departure, Ruth starts to accept she must deal with the fact that her husband has gone off to war. She must get on with the everydayness of life. Then the telephone rings: Adrian's call-up has been postponed and he is returning home for 10 days. Whilst parting is awful, the anticipation of it is worse and the possibility of having to deal for a second time with the deafening sound of the ticking clock counting down to a separation that they both know might end in death, is too much to bear. Ruth falls apart.

Panter-Downes also see the humour in the reserve. In Date with Romance, Helen Ramsey – who has held a candle for Gerald Spalding during the five years he has been in Malaya – has to endure a lunch during which he talks only of the much younger Monica, whom he plans to marry. With nauseating sentimentality he boasts that Monica's hair is so long that she can sit on it. "Mrs Ramsey, deciding that she would find no difficulty in sitting on Monica's hair either if Monica's head were included, said that she really must be running along now."

And whilst it may be true that everyone pulled together, these stories challenge the idea that people were happy about that. Repeatedly her characters resent the intrusion of evacuees in their homes, constantly hoping for their departure. In Combined Operations, desperate to oust their house guests, Gregory and Laura unconvincingly declare they have family coming to stay. As it turns out, Roger and Madeline have been looking for an excuse to leave, finding the pressure of living under someone else's roof so intolerable that they would rather return to London and risk the horror of air raids.

Panter-Downes rarely wrote short stories after the war, preferring to be known for her journalism. She modestly claimed "I'm a reporter. I can't invent." But as with the very best modern fiction, she doesn't invent, but rather frames reality in new ways. In the letters we are shown the outer world of the home front. In the stories, its interior.

All but one of her novels – One Fine Day – are out of print, and she is virtually unknown in this country now. It seems to me a terrible shame to risk losing a writer who makes searingly accurate yet poignantly subtle observations about human beings and how they deal with life. Thankfully, when Persephone Books launched in 1999, the stories were among the first things on their list, and the wartime stories have since become a "Persephone Classic".

In The Guardian's obituary of Mollie Panter-Downes in 1997, Nicola Beauman (who later founded Persephone Books) wrote that she was a writer "who will, no doubt, be rediscovered." It's high time.